Worldwide recession exposes cracks in South Korean society

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Takashi Kitazume

Apr. 1--The continuing decline of the middle class and increase in the ranks of the poor threaten to exacerbate South Korea's demographic woes, Kim Dong Seop, an editorial writer for the Chonsun Ilbo daily, told the March 13 symposium.

Compared with the large-scale unemployment caused by the 1997 currency crisis, South Korean people appear to be relatively calm in response to the current global shock, Kim said. Still, the decline of the middle class that began in the previous crisis is continuing, with the share of middle-income earners as defined by the government in the entire population falling from 68.5 percent in 1996 to 58 percent in 2007, he pointed out.

And the recession triggered by the current crisis has pushed many middle-class people into the ranks of the poor, including those in their 40s and 50s who have lost jobs, as well as small and medium-size business owners left out of social security benefits, he added.

Big companies also responded to the crisis by cutting back on new recruits, with only about 100,000 of the 560,000 fresh university graduates this year estimated to have secured employment, Kim noted, warning that social discontent could intensify among these jobless youths.

Such impacts of the recession could further worsen South Korea's falling birthrate, which is even lower than in Japan at 1.19 as of last year, Kim said. A government estimate shows that the figure could fall even lower to nearly 1 this year, if annual GDP growth falls below 1 percent, he added.

During an economic crisis, an increasing number of people refrain from marrying if they cannot find jobs and couples don't have children because they cannot bear the financial cost of child-rearing, or choose to get a divorce as they cannot sustain their households, Kim said.

And such impacts could linger for two to three years -- or even longer, he said. After the 1997 crisis, South Korea's divorce rate continued to increase for six years, he added.

With the falling birthrate, the population is aging rapidly -- maybe even more so than in Japan, he said. A United Nations estimate shows the median age for all South Koreans in 2050 will be 57.6 years, compared with 54.9 in Japan, he noted.

The South Korean government has established an emergency, 24-hour hot line to help the new ranks of the poor, and has introduced a program to offer financial support for up to six months to those not covered by unemployment insurance benefits, including self-employed people who went bankrupt or nonregular workers who lost their jobs, Kim said.

To alleviate the problem of jobless university graduates, public institutions and some companies are utilizing internship programs as a stopgap measure to provide work opportunities for those youths who cannot find a full-time job, Kim said. About 20,000 people are currently taking part in such programs, with some companies freezing wage increases or cutting executive pay to cover the cost of using the interns, he added.

Kim noted that the current crisis may add momentum to calls for increasing public welfare spending in South Korea, which today accounts for only about 7 percent of GDP -- much lower than the 15 percent in the United States and about 20 percent in European countries.

There are also calls for the government to beef up public education, because expenses on cram schools and other extracurricular lessons for children are a huge burden on typical South Korean households, he added.

Meanwhile, Oh Byung Sang, an editorial writer for the JoongAng Ilbo newspaper, told the symposium that he sees signs of long-term changes in South Korea's political landscape.

In the last session of the South Korean Parliament, President Lee Myung Bak faced strong resistance from not just the opposition but the ruling Grand National Party to his legislative agenda -- an indication that the political power that used to be concentrated in the hands of the president has now shifted toward parliament, Oh said.

Oh further noted that former GNP chief Park Geun Hye, who exerted leadership behind the scenes in resolving the deadlock in parliament, has emerged as a strong candidate to be South Korea's next president. The role she played as a mediator to deal with the recent political confusion confirmed her growing clout within the GNP and no other politicians rival her strong leadership, he said.

And if Park -- daughter of late President Park Chung Hee -- is to become president, South Korean politics, which have swayed widely between left and right with changes in the administration in recent decades, could stabilize somewhere close to the center, Oh noted.

Park is conservative on defense and foreign policy matters but takes more liberal positions on economic, social, women and welfare issues, he pointed out.

Oh said the current political trends may add momentum to calls for partial revision of South Korea's Constitution -- possibly as an issue in the next presidential race.

Park is opposed to the introduction of a Cabinet system and says the president's term should be shortened to four years, with the possibility of re-election to a second term, compared with the current five-year term without re-election, Oh said, adding that such an amendment would contribute to giving more power to parliament and increasing political stability.

Oh also said that with North Korea continuing to take belligerent positions toward the rest of the world, reunification is not likely to be an issue that will have a direct impact on South Korean politics for the foreseeable future.

Related link SOUTH KOREAN JOURNALIST SYMPOSIUM Global crisis forces change on S. Korea TAKASHI KITAZUME

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